This document summarizes a training seminar on insurance for financial associates. It provides details on the seminar such as the date, time, location, and presenter. It then outlines 15 topics that will be covered in the seminar related to insurance principles, products, regulations and ethics. The document continues to define key insurance terms and concepts like express, implied and apparent authority of agents and discusses issues like rebating, twisting, misrepresentation and replacing policies. It emphasizes the importance of ethical conduct for insurance agents.

2. Organized
By
Academy of Learning Limited
Date: June 27, 2015 & Time : 11:00 am to 02:00 pm.
Venue: Academy of Learning Ltd.
Baitul Abed, 53 Purana Paltan,
Dhaka-1000.
Presented by
Mohammed Alamgir Kabir
Head of Academics, AOL.

3. The insurance rules 1958, Insurance law 2010 sction 124 (4)
and Bangladesh Bima Niti-2014 clause 1.4.2 explicitly
endorsed 72 hour the pre-licensing education for Financial
Associates . To educate the insurance agents/Financial
Associates we need to identify the following areas to
address.
1 . INTRODUCTION TO INSURANCE
2. INSURANACE AGENCY AS A CAREER
3. PRINCIPLES OF INSURANCE
4. PREMIMUM AND BONUSES
5. INSURANACE PRODUCTS
6. UNDERWRITING
7. INSURANCE DOCUMENTS
8. POLICY CONDITIONS/SERVICING
9. CLAIMS
10. GROUP INSURANCE
11. MICRO INSURANCE
12. TAKAFUL/ISLAMIC INSURANCE
13. LAW & REGULATIONS
14. FUCNTIONS OF IDRA
15. MARKETING
16. ORGANIZATION STRUCTURE
17. ACTUARY
18. THE ETHICS

4. Who is a life insurance agent?
a) Soliciting application for policies;
b) Describing its policies to prospects and applicants and
explaining how such policies may be purchased.
c) Collecting at least the initial premiums for policies;
and
d) Providing services to prospects and policyowners.

5. Express authority is the authority an insurer intends
to –and actually does, in fact –give its agent in the
contract of agency. For example, an agent has the
express authority to solicit insurance application for
the company.

6. Implied authority is authority not expressly granted,
but which the agent is assumed to have in order to
transect the insurer’s business. For example, an agent’s
contract may not specifically state that he/she can
print business cards with company’s name, but the
authority to do so is implied.

7. Apparent authority is the appearance of, or the
assumption of, authority based on the actions, words
or deeds of the insurer or because of circumstances the
insurer created. For example, by providing an
individual with a rate book, application forms and
sales literature, a company creates the impression that
an agency relationship exists between itself and the
individual.

8. Significance of Authority-whether express implied or apparent – is that
it ties the company to the acts of its agent. The public has no way of
knowing exactly what authority the contract of agency grants the agent;
thus, the agent may be held legally responsible (and the company too)
for any acts – even beyond the agent’s authority – if the public can
resonably assumed that the agent had authority to take such action
In where case the tort is involved, the company may be sued for actual
damages. In such cases the agent may also be sued for punitive
damages also called “malpractice” or “errors and omissions”
Tort is a civil wrong for which the remedy is common law action for unliquidated
damages, and which is not exclusively the breach of a contract or the breach of trust or
other merely equitable obligation. - Prof. Salmond.

9. Bangladesh insurance law 2010 requires that people who
sell insurance have a license from the Government of the
Peoples Republic of Bangladesh. Before IDRA will issue
such a license-whether it is a prospective agent –the
candidate must undergo 72 hours training from an
recognized institute. The license is renewable in every two
years interval.
Furthermore, agents needs to continue his/her education
to keep the license active.

10. While the standards of ethical and unethical behaviour
varies, but certain practices have long been punishable in
nearly every jurisdiction: twisting, mispresentation, misuse
of premiums, replacement and rebating.

11. Rebating occurs when the buyers of an insurance
policy receives any part of the agent’s commission.
An act of rebating also takes place when the agent
gives anything of significant value as an
inducement to purchase a policy which is a obvious
form of discrimination.
Any agent who is caught rebating to an applicant or
policyowner is subject to punishable. The person
who receives a rebate also may be subject to
punishment.

12. Twisting is the act of persuading a policyowner to drop and
replace an existing policy by misrepresenting the terms or
conditions of another policy. Typically twisting is done
without regard for potential disadvantages to the policyowner.
The Term twisting is not to be confused with replacement.
Law may not prevent a policyowner from replacing one policy
with another, provided the agent handles the transaction
according to required procedure. The unlawful twisting
occurs when an agent indulges in a misrepresentation or an
incomplete comparison of policies in order to make a sale.

13. Agents must be on guard continually against making
misrepresentations of any kind to prospects and clients. There
are several forms of misrepresentations, each is serious breach of
ethics and a violation of law. An agent who offers any written or
oral statement that does not reflect the truth about a policy’s
terms or benefits has committed policy misrepresentation. A
agent who makes an incomplete comparison between two or
more policies also is guilty of policy misrepresentation. Usually,
the purchaser of insurance is not familiar with policy terms and
provisions and has a right to know precisely what the policy does
and does not promise.
Penalties for misrepresentation range from fines to
imprisonment according to Bangladesh Insurance Law 2010.

14. The insurance law of many countries provide minimum
standards regarding replacement of life insurance and
annuities. As you will learn, certain kinds of life insurance
policies and annuities build in value over the years, and to
interrupt these policies these policies by replacing them
with others could create serious financial loss for the
policyowners. Consequently, where replacement is
permitted, there are minimum replacement standards to
protect prospective purchasers from unfair methods of
competetion and unfair or deceptive acts of practices in the
business of insurance.

15. Misuse of premiums includes diverting premiums funds for personal use.
Somewhere it requires that an agent establish a separate premium account if
he/she holds such money for any time before turning it over to the insurer.
Commingling premium funds with personal funds is prohibited.
The rules regarding the handling of premium funds generally are just one part
of an agent’s larger fiduciary duty. A fiduciary is a person who holds a position
of special trust and confidence. Agents have fiduciary duties to both their
clients and the insurer they represent. An agent who accepts premiums on
behalf of an insurer or offers advice affecting a client’s financial security is
acting in a fiduciary capacity. Acting as fiduciary requires that an agent:
 Be fit and proper;
 Be honest and trustworthy;
 Have good business reputation;
 Be qualified to perform insurance functions;
 Have knowledge of and abide by laws and regulations; and
 Act in good faith.

16. Who is qualified to purchase insurance and who is not?
The process of answering this question is called risk selection, a
function performed by insurance underwriter. Agents are called
sometimes “Field Underwriter”.
Firstly, the field underwriter needs to know the profile of the applicant
whether he/she is insurable, if so, what type of scheme may be offered
and the rate of premium. In this regard two basic questions
underwriter seek to answer about an applicant:
1. Is the applicant insurable?
2. Is the applicant and the insured are two different people, does
insurable interest exist between the two of them.

17. The underwriting process is accomplished by
reviewing and evaluating information about an
applicant and applying what is known of the
individual against the insurer’s standard and
guidelines for insurability and premium.
Underwriters have several sources of underwriting
information available to help them develop a risk
profile of an applicant. The most common sources of
underwriting information include:
Application, Medical reports, an Attending
Physician’s Statement, Special Questionnaires,
Inspection reports etc.

18. The application form for insurance is the basic source
of insurability information. Thus, the agent’s
responsibility to see that an applicant’s answer s to
questions on the application are recorded fully and
accurately.
There are three basic parts to a typical insurance
application:
Part I – General and
Part II – Agent Report.

19. An agent plays an important role in underwriting. As a field
underwriter, he/she initiates the underwriting process and is
responsible for many important tasks: completing the
application thoroughly and accurately, obtaining appropriate
signatures, computing and collecting the initial premium,
issuing the provisionary receipt.
Submitting Applications and initial premiums to the
company for underwriting.
As a field underwriters, agents should recognized the
importance of establishing a good working relationship
with their home underwriter. Agents always should
check to ensure that applications are filled out
completely and correctly.

24. What is Ethics?
Some years ago, Sociologist Raymond Baumhart
asked business people, "What does ethics mean
to you?" Among their replies were the following:
"Ethics has to do with what my feelings tell me is
right or wrong.“
"Ethics has to do with my religious beliefs.“
"Ethics consists of the standards of behavior our
society accepts.“
"Being ethical is doing what the law requires.“
"I don't know what the word means.“

25. What, then, is ethics? Ethics is two things.
First, ethics refers to well-founded standards
of right and wrong that prescribe what
humans ought to do, usually in terms of
rights, obligations, benefits to society,
fairness, or specific virtues. Ethics, for
example, refers to those standards that
impose the reasonable obligations to refrain
from rape, stealing, murder, assault, slander,
and fraud. Ethical standards also include
those that enjoin virtues of honesty,
compassion, and loyalty. And, ethical
standards include standards relating to
rights, such as the right to life, the right to
freedom from injury, and the right to
privacy. Such standards are adequate
standards of ethics because they are
supported by consistent and well-founded
reasons.
What is Ethics?

26. Get the Facts
What are the relevant facts of the decision
making? What facts are not known? Do we
know enough to make a decision?
Which individuals and groups have an
important stake in the outcome?
With the facts and the stakeholders in
mind, choose an option that we think might
be the best thing to do in this circumstance.
Now, evaluate that option from five different
ethics perspectives. For each, dragging the
slider on the scale to indicate how ethical
you think we choice would be from that
perspective.

27. Utility
Does this action produce the most good and do the least harm for all who are
affected? What good and what harm will or may result?
How will I measure a good outcome? Happiness? Financial impact?
While the potential harm from this action may affect only a few people, is the
harm so great that it would outweigh the good this action might bring to many
others?
Move the slider to evaluate the option you are considering.
More Good
More Harm

28. Justice
Does this action treat people equally or proportionally? Does it
give each person affected his or her due?
Might I have some prejudice or interest that might make me
favor one person over another?
Am I treating each individual the same way, or is there a valid
reason to treat someone differently?
Move the slider to evaluate the option you are considering.
More Just
Less Just

29. Common Good
Does this action best serve the community as a whole, not just
some members? Will this option be equally to everyone’s
advantage?
Does this action contribute to the conditions of social life that
give everyone an opportunity to thrive?
How will my action affect the resources everyone must share,
such as the environment?
Move the slider to evaluate the option you are considering.
Increases Common Good
Decreases Common Good

30. Rights
Does my action best respect the rights of all who have a stake?
Does this action respect the dignity of others?
If I take this action, am I treating others simply as a means to an
end?
Does the action hurt or help others in securing a minimum level
of well-being?
Move the slider to evaluate the option you are considering.
More Respect for Rights
Less Respect for Rights

31. Virtue
Does this option lead me to act as the sort of person I want to be?
What character traits would I be exhibiting if I chose this action? Honesty
or deceit? Compassion or selfishness? Prudence or irresponsibility?
What habits of character would I be developing if I took this action? What
would a person I respect say about this choice?
Move the slider to evaluate the option you are considering.
More Virtuous
Less Virtuous

32. Weigh the Perspectives
The five ethical perspectives on our decision. Do some of these
approaches seem more important than others for this specific
decision?
Utility…………………………………………………
Rights………………………………………………..
Justice……………………………………………….
Common Good……………………………………..
Virtue…………………………………………………
In brief, professional excellence comes from the ethical practice
of the knowledge and skills.
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